CFMEU ‘enjoy a significant level of influence’ over Victorian government, Big Build royal commission hears

The royal commission into allegations of corruption on Victorian Big Build projects has heard a major construction company feared putting the Construction, Forestry and Maritime Employees Union (CFMEU) offside because of its close links to the Daniel Andrews Labor government.

The first block of hearings under the commission into the integrity of major public and civil infrastructure construction projects in Victoria will hear evidence about the union’s involvement in a level crossing removal project at Gap Road in Sunbury, north of Melbourne, in 2022.

The project involved the removal of a level crossing and the construction of a new rail bridge and underpass.

The counsel assisting the commission, Chris Young KC, said 20 witnesses have been compelled to appear during the November hearings.

But he warned that others were not complying with orders to produce documents to the commission, including using the excuse of “government policy” to delay their production. Failing to comply with such orders was a criminal offence.

“It is extremely concerning that some parties have not complied with the terms of those notices to produce,” Young said.

The hearings in November will focus on what government officials did during a June 2022 meeting in order to appease the union, who had forced work to stop on the Gap Road project.

Young showed the commission evidence that – in the years before the union interfered in the project – there was increasing awareness within the construction sector about the prospect of industrial action curtailing work, and the growing influence of the CFMEU.

He said that in 2017, John Holland, one of the companies involved in the Gap Road project, noted that the CFMEU was “proud of the fact that none of their site visits are code compliant”. It also noted in an email that the “significance of the CFMEU relationship with the Andrews government in Victoria, and the impact this is having, and will have in the future, in respect of client relationships with the Victorian government”.

Such was the extent of that relationship that John Holland officials suspected the CFMEU would have a “substantial amount of knowledge around proposed government tenders and input” in respect of the tender process.

“We are thus particularly mindful of the optics in our interactions with union stakeholders,” the 2017 email said.

Four years later, the construction company noted that “the CFMEU are emboldened by their success on major infrastructure projects”, and later in 2021, that they “enjoy a significant level of influence within the state government”.

“It is a level of influence not seen in previous years and is unlikely to diminish.”

Police called to dispute

Young told the hearing that four of the CFMEU officials who would later force work to stop at Gap Road had similarly interfered in the Metro Tunnel project.

He said the officials entered the Gap Road project’s eastern portal 29 times in January 2020, and were involved in activity considered to be unlawful, but nonetheless received attention from the government, who asked if the safety issues they raised were valid.

Young said that a “very high risk rating” was applied to the possibility of industrial action on Gap Road.

But he said that it was not until May 2022 where this risk escalated, and CFMEU officials more regularly appeared on site.

By early June, Neil Thompson, the health and safety manager for the Rail Network Alliance involved in the project, was calling police, desperate for their help in removing union officials who were stopping work including by sitting on barriers and refusing to move.

Young tendered internal notes taken on the union activity that showed there were references to the CFMEU officials warning workers “you guys better not turn up tonight otherwise we will smash you during the day” and “their life would be make very difficult for them personally” if they continued working on the project.

A recording of a phone call between Thompson and WorkSafe and a subsequent email showed that on 6 June – the day before a meeting that is central to the commission’s hearings – he was unclear about how to get work to continue on site.

He stressed the need for the union to be removed, given trains had been stopped on the line in order for a bridge to be built.

“We actually called Victoria police to escort themself off site. Victoria police said there was nothing they could do,” Thompson said in the call to WorkSafe.

“We’re going around in circles a bit because last week WorkSafe said there was nothing they could do.

“We’re just having to put up with no work happening at the moment.”

The following day, Young said, there was a 13-minute meeting, followed by a subsequent meeting at the CFMEU, which resolved the issues.

Two CFMEU officials, Joe Myles and Paul Tzimas, attended the meeting, along with four officials from the project, he told the hearing.

Young said that while the commission had obtained significant documentation regarding the events leading up to the meeting, little was known about what occurred during it, and why it was significant, so the commission would be reliant on the memory witnesses had of conversations four years ago.

The key questions included what stopped the work, and whether those disruptions were used as leverage by the CFMEU, he said.

It remained unclear exactly how much the CFMEU disruption to works on the site had cost, nor what the cost was to end the disruption, Young said.

But the union interrupted work on the site for 36 hours – and traffic controllers employed after the disruption charged significantly more than those previously employed, documents in evidence before the commission show.

The hourly rate increased from about $45 to $88, or from $59 to $147 for penalty rates, the documents show.

This meant that, for example, one 10-and-a-half hour shift cost $609 under the previous firm, but $1225 for the same shift under the new firm, Young said.

The Major Transport Infrastructure Authority director general started considering the cost implications of a CFMEU campaign to increase the rates of traffic controllers about the same time the disruptions occurred on the Gap Road project.

A September briefing prepared for the then-minister for transport infrastructure, Jacinta Allan, estimated that the changes could cost the authority $60m-$78m for current projects, and well in excess of $400m for those projects in planning.

Royal commission that ‘Victorians deserve’

Earlier on Monday, the premier, Ben Carroll, said the royal commission was one “that Victoria needed and Victorians deserve”.

“I want every Victorian to get the answers they deserve,” Carroll said.

“This is a royal commission for Victoria. It’s a tough royal commission. It’s truly independent – [it has] the broadest terms of reference possible, a special prosecutor established as well. I said I’d do this in my first press conference and now it is up and running as it should be.”

Carroll confirmed legal representation for two former premiers, Jacinta Allan and Daniel Andrews, was “supported by the state” as has been the case at “other previous royal commissions”.

The opposition leader, Jess Wilson, said: “They’ve trashed the future of this state, and now Ben Carroll is allowing the taxpayer to foot the bill for them to be defended in the royal commission, it doesn’t pass the pub test.”

The hearing continues.

Benita Kolovos contributed reporting to this story